Information for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax Loss on discontinued operation (pretax) Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income Depreciation deducted on tax return in excess of depreciation expense Permanent differences (all related to operating income): Nondeductible portion of entertainment expense The applicable enacted tax rate for all periods is 25% What should Hobson report as income from continuing operations? $ 230 10 85 175 20

Information for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax Loss on discontinued operation (pretax) Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income Depreciation deducted on tax return in excess of depreciation expense Permanent differences (all related to operating income): Nondeductible portion of entertainment expense The applicable enacted tax rate for all periods is 25% What should Hobson report as income from continuing operations? $ 230 10 85 175 20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculating Deferred Tax Balance Evergreen Company's reconciliation between pretax GAAP income and taxable income follows for the year. Pretax GAAP income $240,000 Depreciation adjustment (48,000) Permanent difference 1,500 Taxable income $193,500 The company had one temporary difference due to the GAAP basis of equipment exceeding the tax basis of equipment. Record the income tax journal entry for the year, assuming a tax rate of 25%. Assume that the January 1 deferred tax liability balance was $6,000. • Note: Round amounts to the nearest whole dollar. Account Name Date Dec. 31 Income Tax Expense Deferred Tax Liability Income Tax Payable To record income tax expense. Dr. 0 0 0 Cr. 0x 11,625 x 48,375
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nformation for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax $ 155 Loss on discontinued operation (pretax) 32 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 10 Depreciation deducted on tax return in excess of depreciation expense 25 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 5 The applicable enacted tax rate for all periods is 25%. What should Hobson report as income from continuing operations?
1. ACE Company had pretax GAAP income of $50,000 for the tax year ended December 31. Label each of the following items as either Deferred Tax Liabilities (DTL) or Deferred Tax Assets (DTA) 1. Excess accelerated depreciation for tax purposes, $5,000 2. Unrealized holding gain on securities accounted for under FV-NI, $2,000 3. Unrealized holding loss on securities accounted for under FV-NI, $2,000 4. Rental receipts received in advance, $30,000 5. Litigation contingency accrual, $10,000 6. Six-month prepaid rent deposit, $12,000 40.000 5 2.80
Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 160 Loss on discontinued operation (pretax) 20 Temporary differences (all related to operating income): Accrued warranty expense in excess of expenseincluded in operating income 20 Depreciation deducted on tax return in excess ofdepreciation expense 25 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 10 The applicable enacted tax rate for all periods is 40%. How much tax expense on income from continuing operations would be reported in Hobson's income statement? multiple choice: a. 66 million b. 64 million c. 68 million d. 44 million I have tried several different ways but none of them come up with answers close to any of the ones to choose from.
Item 4 During 2021, its first year of operations, Baginski Steel Corporation reported a net operating loss of $408,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required:1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests that future taxable income will be sufficient to benefit from future deductible amounts arising from the net operating loss carryforward.2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 280,000 Permanent difference (15,600 ) 264,400 Temporary difference-depreciation (20,900 ) Taxable income $ 243,500 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Information relating to Waukegan Company for the current year is as follows: Income from continuing operations before tax $ 140,000 Income from discontinued operations (pretax) 40,000 What is the amount of the income tax expense that should be allocated to the income from discontinued operations? (Assume the effective tax rate is 25%) income tax expense
Dix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 $ 100,000 20X2 (200,000 ) 20X3 240,000 Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance. Required: What amount of taxes does Dix pay related to its 20X3 tax return?
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For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Accounting income or loss for Aberdeen Corporation, following IFRS, is below: Year Accounting income/(loss) Tax rate percent Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 $160,000 250,000 80,000 (160,000) (380,000) 130,000 145,000 30 30 25 25 25 25 25 Assume that there were no permanent or temporary differences between accounting and taxable income. Required Prepare the tax-related journal entries for Year 3 to Year 7. Aberdeen Corporation believes that it will be able to use any loss carryforward in future years. Aberdeen Corporation will apply the available carryback provisions to the earliest years first. Include your calculations.